Strategy is central to any leadership mandate

Last week I talked about the dilemma faced by my friend Mark, a Vice-President of Marketing for a national retailer.

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His boss is holding him to account for the sharp decline in sales and is expecting him to immediately increase promotional spending to fix the problem. His dilemma is that he knows that this is unlikely to work since his marketing intelligence has indicated that the sales decline is due to a deterioration of his company’s value proposition in the mind’s of many of its customers due to a number of factors not influenced by promotional spending.

Finding advantage requires situational awareness and understanding

I see this frequently in my consulting work. Mark’s boss is seemingly unaware of the actions of competitors and the impact that these are having on customer expectations, preferences and choice. He lacks situational awareness and understanding. As a result, the strategy he is imposing on Mark is off-target. Increasing promotional spending is simply not going to work.

The CEO must be held to account for the company’s strategy, not Mark. Determining strategy has been a core mandate for leaders throughout history. But, here’s the rub. Poor strategy decisions are the natural outcome of poor situational awareness and understanding. The CEO has mandated the wrong strategy. It is the company’s core business strategy that is misfiring, not its marketing communication strategy. To reverse the company’s declining sales he must lead the development of a business strategy centered on creating, delivering, and communicating a compelling value proposition—one that provides his company with an advantage over competitors for winning with customers.

What history can teach leaders about finding advantage

Without situational awareness and understanding there can be no strategy. The cornerstone of strategy is about understanding and exploiting the opportunities that can provide advantage. Military history, in particular, provides many rich examples.

Sun Tzu’s The Art of War

The Art of War, written by Sun Tzu in China over 2,000 years ago, “is the first known study of the planning and conduct of military operations.” (Griffith, Samuel, B.) Still considered to be one of the most important works of military literature, it has been a part of the course curricula of military colleges for many years. Since the early 1980s it has also been deemed to be an important part of the curriculum for many business school strategy courses as well.

Sun Tzu’s chapter, ESTIMATES, clearly makes the link between situational awareness and understanding and a winning strategy. He directs the reader to study the, “five fundamental factors” in order to reveal the opportunity that provides advantage against the enemy based on the capabilities of one’s own military forces:

  • Moral Influence – “that which causes the people to be in harmony with their leaders, so that they will accompany them in life and unto death…”
  • Weather – “the effect of natural forces; the effects of winter’s cold and summer’s heat and the conduct of military operations in accordance with the seasons.”
  • Terrain – “distances, whether the ground is traversed with ease or difficulty, whether it is open or constricted, and the chances of life or death.”
  • Command – “the general’s qualities of wisdom, sincerity, humanity, courage and strictness.”
  • Doctrine – “the organization, control, assignment of appropriate ranks of officers, regulation of supply routes, and the provision of principal items used by the army.”

For Sun Tzu, understanding these factors are critical. “There is no general who has not heard of these five matters.  Those who master them win; those who do not are defeated.”

The Battle of Thermopylae

The Battle of Thermopylae was fought in 480 BC, between an alliance of Greek city-states, led by King Leonidis of Sparta and the Persian Empire of Xerxes 1 at the narrow coastal pass of Thermopylae over the course of three days.  It has been used by some as an example of a brilliantly conceived and executed strategy even though the Greek forces were ultimately defeated after a local resident, Ephialtes, betrayed them.

Leonidis’s strategy–choosing to engage the Persians at the pass of Thermopylae–seems so deceptively simple.  Most brilliant strategies often do. However, Leonidis’s situational awareness and understanding revealed this narrow pass as the ideal terrain to provide the opportunity for the small, well-trained and highly motivated Greek army of 7,000 to gain advantage over a Persian army estimated by historians to be between 100,000 and 300,000.  Had it not been for the treachery of Ephialtes it may have ended in one of the most spectacular military victories in recorded history.

What are the parallels between these examples and conceiving business strategy

THE BATTLEGROUND

THE BUSINESS WORLD

  • Know the battlefield
  • Know your enemies
  • Know Yourself
  • Know the marketplace
  • Know your competitors
  • Know Yourself

Seek the opportunity that provides advantage

Deepen the advantage by achieving “fit” in your activities

Conceiving strategy is central to any leadership mandate

As Jack Welch once famously said to his senior leaders at G.E., “If you don’t have an advantage, then don’t compete.” His comments signaled that the company would divest itself of business units with no competitive advantage. The implication of this decision on the continued employment of the leaders of these business units was obvious.

It’s time that Mark’s boss accepts that it is his responsibility to lead the development of a winning strategy for the business and that his own poor situational awareness and understanding is hurting the business.

If he doesn’t get it soon, then perhaps the board should take action and replace him with someone who does.

About ashleykonson

STRATEGY CONSULTING | EXECUTIVE COACHING | CORPORATE TRAINING | KEYNOTE SPEAKING | Ashley Konson is the Managing Partner of Global Brand Leaders Inc., a new kind of brand consulting company dedicated to making brands and their teams leaders across the globe. He is a Brand Leader, Business Consultant and Award-Winning Educator, and a recognized thought leader and fervent advocate of the premise that strong brands and businesses achieve and sustain their market positions because they are strong Inside out™.
This entry was posted in Brand Strategy, Competitive Strategy, Leadership and tagged , , , , . Bookmark the permalink.

6 Responses to Strategy is central to any leadership mandate

  1. Ashley how come we are both talking about leaderships. In fact i raised the same question on the sps discussion a little while ago leaders dont know how to handle failure and furthermore dont know when to quit. Hence strategy failure can be attributed to the leaders particualrly CEO’s despite code of ethics in Corporate Governance (which incldently limited to public quoted c companies) all other CEO’s seem to exempt from such responsibility of being accountable and look for skapegoats in their organisations to shift the blame or pass the baby.

  2. Brad Olsen says:

    One thing that astounds me about strategy discussions is that they always look inward and at competitors when the first port of call has to be how you build uniqueness to your business so consumers/customers will engage and buy your product. Predictable sales come from a better understanding of key equity demand drivers for your business and how to postion and architect your business behind these key drivers of demand.

    • ashleykonson says:

      Brand, thanks for commenting on my post. I’m not sure however if I fully understand your point. I thought that my post–together with my earlier one about my friend Mark–made this point explicit

      • Brad Olsen says:

        The nub of most issues in business that are performing poorly at the moment is that marketing has lost control of the consumer as the basis for architecting the business. This is because marketing is seen as the controller of advertising only. Stategically the business needs to get it’s 4p’s to reflect unique positioning that gives consumers a reason to buy. The positioning needs to be reflected in the base stragey of the business yet you go through the strategic plans of many businesses and this is not clear in the strategic planning work done.

      • ashleykonson says:

        Brad, Thanks for your reply. I’m in complete agreement with you. 4P’s for a product based business and 8P’s for a Services based business. My post It takes more than branding to build a strong brand and business is a case in point.

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